Local gasoline prices could jump as oil surges

By Martin B. Cassidy, STAFF WRITER

Published 4:09 am, Tuesday, September 1, 2009

Over the summer months, the steady rise in local gasoline prices in Stamford has been noticeable, but nowhere as distressing to last year's dire $4-plus a gallon prices, Greenwich resident Rosemary Dominice said.

A 40-year area resident, she doesn't believe the prices are likely to fall soon.

"Of course I would like them to be lower," Dominice said. "But I've adjusted to it now."

On Thursday, the average price of regular gasoline in the Bridgeport-Stamford area was $2.88 a gallon, according to the AAA Fuel Gauge Report, 40 cents above where it stood in mid-May.

Statewide, the price was $2.80, up 17 cents from a month ago, according to the report.

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Crude oil prices in New York also surpassed $74 dollars a barrel Thursday, a high for 2009 and up $7 from Monday, a surge that clearly shows increased investment in fuel as positive economic news, Peter Beutel, an energy analyst for New Canaan-based Cameron Hanover.

Beutel said he believed that the gains in oil might herald higher gasoline prices, as oil prices rise despite overall weaker demand than last year.

That would help sap any burgeoning economic rebound, Beutel said.

"In the market you have the thinking that the recovery is coming and it is always a bad sign when you continue to make new highs," Beutel said. "This isn't terribly good news for consumers because demand hasn't picked up and will begin to siphon more money out of the hands of consumers that could be spent in other economic sectors."

Last summer gas prices hit $4.37 on July 8, though gas prices fell rapidly as the economy worsened, reaching a low of $1.72 on Jan. 2,

according to AAA.

"It seemed like in the fall that a lot of the big investors who were to blame for the price hikes were getting out of the market in an orderly fashion," Fox said. "What the CFTC is talking about doing is of great magnitude and they are moving much more quickly than usual."

Steven Megroti, of Stamford, said he believes it was time that the government stepped in to monitor energy trading and rein in brokers from buying up oil contracts and betting on increased demand after the recession.

Megroti said the overall increase in gasoline prices in recent months has reinforced his habit to consolidate errands and other trips, which he acknowledged was a positive thing, but he fears another large increase would cut into his living expenses.

"I think they should do something, because the speculation in oil really impacts people," Megroti said. "I know there have to be limits on how much they interfere but it really cuts deep."

State Rep. Jim Shapiro, D-Stamford, who sponsored a bill seeking to ban the practice of zone pricing in Connecticut, also said that federal regulation would be a helpful step to save drivers nationwide from gas prices that vary widely from market conditions like supply and demand.

Zone pricing is the practice whereby oil companies and distributors charge more to gas station in some locations, which results in significantly higher gas prices in Fairfield County.

"I think there is a recognition that speculators bore a very significant portion of the responsibility for the spike in gas prices last year," Shapiro said. "When the price of oil falls that is not immediately reflected at the pump but when they rise you see it immediately."

Staff Writer Martin B. Cassidy can be reached at martin.cassidy@scni.com, or 203-964-2264.